It’s one of conditions precedent to be satisfied under two SPAs
PETALING JAYA: Felda Global Ventures Holdings Bhd (FGV) has received the nod from the Finance Ministry (MoF) to acquire a 55% stake in China-based edible oil producer Zhong Ling Nutril-Oil Holdings Ltd.
The agri-business giant told Bursa Malaysia that it had obtained the approval from MoF via a letter dated March 16.
FGV said the approval was one of the conditions precedent to be satisfied under two proposed share purchase agreements – SPA 1 and SPA 2 – which were signed with the vendors of Zhong Ling shares on Feb 26.
Both SPAs require the approvals of Bank Negara and MoF due to the substantial funds involved in an overseas transaction. FGV would also need to get its shareholders’ approval.
Notably, the Zhong Ling deal is worth RM976.25mil, of which under the terms of the deal, FGV has agreed to pay a sum of RM537.05mil to Zhong Hai Investment Holdings Ltd for a 26.4% stake in Zhong Ling.
The group will also pay RM439.20mil to 14 other vendors for a 28.6% stake.
Recall on Monday that FGV had said it had cancelled its application to one of the regulators – which it did not name – “pending more information on the investment from FGV”.
“To date, no subsequent application has been submitted to the said regulator,” the company had then said.
FGV noted that it had made applications to Bank Negara and MoF concurrently in April last year seeking their approvals for the proposed deal.
“Under no circumstances whatsoever does the board of directors of FGV impose an express or implied obligation on the regulators to process and approve any approvals in connection with the proposed acquisition within any time period agreed by the parties in SPA 1 and SPA 2,” it said.
Under the agreements, the parties had agreed that the conditions precedent – including getting the regulators’ green-light – were to be fulfilled within five days.
On March 4, FGV’s unit – Felda Global Ventures Downstream Sdn Bhd – and the vendors had mutually agreed to extend the period to satisfy the conditions precedent of SPA 1 and SPA 2 from March 4 to March 18, or any other date as may be mutually agreed on by the parties.